Ten years after the
The Order’s recommendations are primarily based on the new findings of an economic analysis carried out 10 years after the implementation of the Pay Equity Act. The study was conducted by Analysis Group, Economic, Financial and Strategy Consultants on behalf of the Order.
For ORHRI, the survey’s findings, together with the expertise of Quebec CHRPs and CIRCs and the conclusions of the Minister of Labour’s report, clearly indicate that even though the Act has had some positive repercussions, making it more complicated could impede the attainment of its objectives.
Close to one-third of organizations are not yet in compliance with the Act. Getting our priorities straight!
According to the Minister of Labour’s report, 68% of organizations are in compliance with the Act, which means that despite the deadline set in 2001, close to one-third (32%) of organizations have not yet launched or completed the implementation of their pay equity plan. Accordingly, the Order is convinced that this issue should become a top priority rather than creating new obligations for organizations, particularly in respect of maintaining wage parity as the government approach appears to suggest.
“Clearly, instituting and supporting pay equity is a choice that we have made as a society. Efforts should first be concentrated on those companies that haven’t yet begun or completed the process. If the aim is to improve wage parity in Québec, it is important to ease the constraints involved in implementing and maintaining pay equity plans,” explained Florent Francoeur, CHRP, President and CEO of the Order.
Taking compliance costs for organizations into account
The findings announced yesterday show that implementing the process generated average direct costs of $161 per employee for those companies that have achieved pay equity (see Appendix for detailed table). For firms with 10 to 49 employees, this cost climbs to $413, which is significantly higher than for organizations with 50 to 99 employees or 100 employees or more -- where compliance costs respectively amount to $115 and $68 per employee. In the Order’s view, these figures clearly demonstrate that it costs small businesses more to apply the Act, a fact that should be taken into account if we wish to achieve the objective of this legislation.
”We shouldn’t forget that the smaller the business the harder it will be for it to integrate new regulations and amendments to existing regulations because it lacks the structure to manage this additional burden. That’s why we recommend that a more in-depth analysis be carried out to examine all the issues involved in extending certain obligations for businesses with 10 to 49 employees before amending the Act,” added Francoeur.
A wage gap reduction of around 1% attributable to the Act
The study also shows that even though the wage differential is still 11%, this figure represents a 2% decrease during the study reference period (from 1997 to 2005). Almost half of this reduction, i.e. ¾ to 1 percentage point, is a direct outcome of the Act.
“The impact of the Act in reducing the wage gap may be surprising, but we shouldn’t forget that without this legislation even this decrease wouldn’t have occurred. The Act has also has raised employers’ awareness of the issue and constitutes a gain for the employees targeted. Of course much still remains to be done. That’s why future amendments shouldn’t create additional obstacles to achieving the aims of the Act,” concluded Francoeur.
To learn more
The complete ORHRI brief, including the economic study on the Pay Equity Act, is available in PDF format (in French only).